INDIA - Most attractive retail destination $ 320 billion now -- $637 billion by 2015 CAGR 5% Highly Fragmented A nation

on of shopkeepers 14% to Indias national GDP Jobs for 7% of workforce

RETAIL INDUSTRY

ORGANIZED 98%

UNORGANIZED 2%

Organized sector officially licensed retailers Eg. Large privately owned retail company, retail chains etc. Unorganized sector hand cart vendors, convenience stores, paan/beedi shops, local kirana stores

Shift in Indian population demographics

Increase in purchasing power hence consumer spending

Market flooded with global brands

Demand for branded and luxury goods increased

Reversed the saving habit to habitual spending

Perceptible quality and variety of choice

Consumer demanded organized retail experience

Large Large number of working youth (median age 24) youth (median age 24) number of working Growing number of working women Growing number of working women Nuclear families living in urban areas Boom in services sector Nuclear families living in urban areas Boom in services sector

Huge investment in retail infrastructure Traditional markets replaced by new formats Development of mall culture, supermarket, hypermarket, and departmental stores. Food entertainment shopping under one roof

SPENCERS RPG Reliance TATA Future group

Lack of efficient supply chain

Inefficient Third part logistics services Absence of proactive channels

Cold chains Logistics infrastructure warehousing

Lack of skilled employees Inadequate quality control Variation in policy regimes across different states Stringent labour laws Lack of status as an industry therefore difficult to raise capital for expansion

Violent protests by small retailers for closure over illegal shops

Established in 1969. Top of Fortune 500 list in 2007

3 subsidiaries :
Wal-Mart International Sams Club Wal-Mart Stores Division US

9 Different retail formats Pricing Strategy

Low Pricing Strategy Always low Prices General merchandise prices set after price checks of K-Mart and Target

stores
Food Prices set on basis of zones corresponding to food distribution

centres

Economical Prices

Transportation Cost Savings

Huge Volume of Purchases

Better Discounts to Customers

Faster replenishment of merchandise

IT in Supply Chain Management

Think Global Act Local

Bar codes for inventory tracking Satellite communication for co-ordination Electronically order placing to suppliers Use of RFID tags

Wal-Mart international : international operations 3000 stores in 13 countries Succesful in North and South America but not in

Germany and South Korea Restricted International approach : discriminatory in entering international markets

Why Bharti ?
Market leader in Indian telecom market Thorough understanding of distribution in Indian

Joint Venture

markets Fully aware and capable to succeed in complex environment of Indian market Capability to attract FDI

2 different formats : franchised retail company &

wholesale cash and carry joint venture

 50-50 venture for back end SC management

and wholesale cash and carry operations Also different contract Walmart sharing technology & expertise to support retail stores built by Bharti Aim to link farmers directly to retailers Strong back end infrastructure Cold chain logistics

Protests by small & medium local businesses Criticised for not being socially responsible company Widely criticised for practises such as : predatory pricing, discrimination against women, squeezing suppliers Dealing with Indias unique cultural factors Supply Chain Management challenges
Underdeveloped physical infrastructure Poor quality of roads, trucking, reluctance to adopt

modern technology Cutting out middleman would create more opposition

Emergence of organised retail sector Wal-Marts joint venture with Bharti aimed at capitalizing growing middle class

Bharti ideal partner for Wal-Mart

Many unique challenges in India to overcome If challenges tackled , this partnership could transform Indian retail